Pending home sales in the U.S. increased 6.7 percent in May, reaching a six year high, according to data released today from the National Association of Realtors.
The Pending Home Sales Index increased to 112.3 from the revised 105.2 in April and is 12.1 higher than May 2012. Reflecting only contracts and not closings, pending sales are at the strongest level since December 2006, NAR reports.
Pending sales have been above year-ago levels for the past 25 months. The latest jump in contracts could be an effect from increasing mortgage rates and pent-up demand.
"Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher," NAR chief economist Lawrence Yun said in the statement.
Mr. Yun expects the national median existing-home price to increase by more than 10 percent to almost $195,000 in 2013, representing the strongest increase since 2005. Similarly, recent data from Case Shiller showed record gains in U.S. home prices.
Existing-home sales are expected to increase 8.5 to 9.0 percent to 5.07 million in 2013, the highest level in seven years. NAR previously reported a four-year high for sales.
More data from the Pending Home Sales Index:
Northeast was unchanged at 92.3 in May but is 14.3 percent above a year ago.
In the Midwest the index jumped 10.2 percent to 115.5 in May and is 22.2 percent higher than May 2012.
Pending home sales in the South rose 2.8 percent to an index of 121.8 in May and are 12.3 percent above a year ago.
The index in the West jumped 16.0 percent in May to 109.7, but with limited inventory is only 1.1 percent above May 2012.